Asset Tax impact on Coin Market
MarkInDavis
Posts: 1,719 ✭✭✭✭
If proposed taxes on assets or wealth (as opposed to income) should come to fruition in the near or not so near future, would this drive up the price of precious metals and consequently coins? My thought being these assets may be easier to hide than some and thus come into high demand. Or would it have the opposite effect as the value of precious metals and coins would be easily calculated and potentially taxable? Or would these proposed asset taxes have little impact on the precious metal/coin market because they would impact so few?
Your thoughts?
And please let's not discuss whether these proposed taxes are a good idea or not, just the impact they would have on the precious metal/coin market if they were to be enacted.
Respectfully, Mark 0
Comments
If it's a "from here on" situation the tax would be collected at the point of origin like at the mint or other bullion houses producing generic PM products. Depending upon the magnitude of the tax it wold likely inhibit future PM sales since it is not always assured that the tax could be recovered upon resale. How many times could the same kilo bar of silver get taxed? I think it would create a bigger black market in PMs. Maybe ASEs would be exempt.
I think if you see that happen you will witness trillions of assets leave this country along with the owners.
If I understand what is being proposed is a yearly tax on assets. As if they don't get enough tax in the form of capital gains created buy inflation.
I guess they'd have to prove that you have them or is it the honor system? I wonder if an NSA type examination/audit of transactions from bullion houses, eBay and other venues would occur.
Such a thing would motivate many to the financial privacy aspects of bullion and coin investment.
At this point successful market makers operating on a narrow spread of fungible items will take over for this new class / huge influx of investors. These people will be looking for bulk material with narrow transaction costs not the sticker game. Heck it could even wake up the generic dollar market. TPG competition will come down to price and the one with the best price / market confidence mix will emerge victorious (the other bankrupt) or they may merge into one entity like xom. The sticker game like Homo Neanderthalis will likely fall off the industry evolutionary tree for the main part of the coin market. AI grading / pricing along with smart, self grading Holder is another potential game changer.
Rare, expensive coins will continue mainly at auction or privately as most of the population can’t afford these anyway. A sticker service could evolve to serve this market.
I don’t know about coins but I imagine real estate and stocks may be the initial targets.
Many states and localities have business inventory taxes. As a replacement for a progressive income tax it would likely spawn a new species of accountant. For coins or precious metals the values are too low to make any difference for those holding assets in that form. Hoarders already lose asset value - with rare exception - through inflation, unproductive capital, storage/security expenses and other factors holders rarely mitigate.
As Cougar1878 noted, many would try to hide assets of all kinds, and that would generate an invasive tracking response across the economy.
Business inventory taxes cause major movement of product. Back in the late 1970's I recall a discussion with a moving company in California that did a thriving business picking up inventory in California and moving it to warehouses just across the Nevada state line. The inventory would only stay there a few days ... just long enough for it to avoid being counted in regard to the inventory tax ... and then it would be picked up and transported back to California.
I think you folks are playing a little too loose with the tax fraud. Just because you could hide a coin in a mattress doesn't mean you legally could. And you would never be able to sell it openly because you would be exposing your untaxed asset.
Such a tax would kill coins and bullion as they don't appreciate fast enough to make them worth the tax. Imho
+1
It's hard to believe that the members of Congress would vote for a national asset tax because it would hit them hard unless things like stocks, bonds and cash were exempted.
There are asset taxes in states like West Virginia because they had to tax people like coal miners who often did not own any real property.
Back in 1932, the majority elephump party tried to pass a national Value Added Tax (VAT). President Hoover thought this would suck up extra cash. More reasonable folks - like ordinary people - realized that they would end up paying a lot and high-end folks would pay far less than under the current progressive income tax. The proposal fell apart under public pressure and the incoming mule party vowed never to suggest a VAT again.
VAT is the normal thing in the EU and many other countries.
More and more tax schemes..... Most people do not realize the mountain of taxes already endured....sooner or later, there will be a tea party. Cheers, RickO
Just because one crackpot politician is throwing this idea around to jump start her Presidential campaign gives me no reason for concern. I'm not going to worry about it.
Member ANA, SPMC, SCNA, FUN, CONECA
Hoover was a brilliant engineer, but a bad president. His inaugural medal summed up his greatest accomplishments on the reverse.
Don't we already pay asset taxes on real estate and vehicles?
ZeroHedge makes debut at White House press corps briefing
Yep. Made a fortune in gold mining in Australia, but kind of sad. He was an excellent administrator and was very effective in the post-war recovery of Belgium. But as Commerce Secretary under the really-dumb Harding and Coolidge he retarded progress in radio and television as well as wireless navigation. As president, each evening he and the wife dressed for dinner, then usually ate alone. He was tentative and indecisive, with little concept of long-term results -- quite common among engineers "promoted" to management. He blamed FDR for his failures, even though much of FDR's early recovery policy was the same as Hoover's but on a large scale and with a view to longer application.
(Yes, Virginia, Hoover proposed dropping the gold exchange standard in the summer of 1932.)
Not to the Feds
Two words: black market.
Will never happen until the country becomes Socialist or Communist.
bob
Banks are already required to file Suspicious Activity Reports with the Department of Treasury for any transaction over $10,000 including cash deposits. This information is shared with the IRS and law enforcement.
Form 8300 is the form that banks are required to file for cash transactions of $10K or more which can be in a single transaction or "relate" transactions. Suspicious Activity Reports or SARs are something different. SARs garner considerably more attention from the Feds than do 8300s.
My comment was directed to whether or not the Feds might check out APMEX's records to see if any non-dealers/individuals bought large quantities of PMs. If you buy 1000 1 ounce silver bars, that purchase is required to be reported so that the IRS can tax your profits if/when you sell them.
They always make sure that THEY are exempted.
Great transactions with oih82w8, JasonGaming, Moose1913.
I think there will be a lot more cash PM transactions at coin shows.
Great transactions with oih82w8, JasonGaming, Moose1913.
again, don't embrace fraud as a strategy. If the Feds or states made bullion sales reportable, that would include cash transactions. Could you find a dealer willing to bend the rules? Possibly. But that doesn't mean you won't both get fined.
And if you start with unreported purchases, your sales could also have to be of the black market variety. And you would lose the ability to deduct losses.
By all means, lobby your representatives to get the laws you want. But think long and hard about adopting tax fraud as a hobby strategy.
Vote for me. No new taxes.
As the resident semi-liberal here, I can tell you that the type of taxes you describe are not part of the sort of taxation adjustments that 90% of the "center-left" thinks are rational. So sad how ignorance and fear will cause some people to close their eyes to anything but the most extreme.
We do not want your gold
We want your automatic weapons We want universal Medicare. 
Until the Guvmints win the war on cash. Best start amassing cash now tho.
Not going to happen. If it does by some remote chance, it will be on a pretty high value, so it will not impact the majority of people.
It will have no effect on coins
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
If I may?
Mapleman
Nice post.....I like that. Kind of like Margret Thatchers philosophy on socialism. Socialism is great until your unrest out of other peoples money.
Ike Specialist
Finest Toned Ike I've Ever Seen, been looking since 1986
Mate just the tippie top of the billionth coin. How many coins could one possible want.
Best place to buy !
Bronze Associate member
I have deleted multiple politically charged comments from this thread. If they continue I will be closing the thread. Thank you all in advance for staying on topic.
Heather Boyd
PCGS Senior Director of Marketing
Maybe that's what they wanted at the Roger Stone residence at 6 A.M. one morning last week
Supreme Court ruled years ago of "right to privacy" guaranteed by the constitution. I doubt any law that requires citizens to report an accounting of all their assets will hold much water. Current tax law is limited to reporting of income. Also covered by property tax law are real estate and automobiles, where tax authorities do not have to invade your privacy to asses the tax. Public records provide them with what they need.
ZeroHedge makes debut at White House press corps briefing
That’s how taxes get started. The government gets its foot in the door. The income tax during the Civil War was on such high incomes that only a few people paid it. Ditto for the first income tax passed after the constitutional amendment that made it legal. Then it it started creeping down to a lot more people.
That’s why I have opposed the “consumption tax” for years. They tell you that it would replace the income tax, but as sure as sunrise, we will end up with both taxes.
If it does happen by some remote chance it will impact all people. The only way for those determining if assets are taxable is to have a complete list of all your assets. Then they will determine if you owe the tax or not. I doubt they will just take your word that your total falls below the threshold. And what if they don't agree with the accounting/list you provide? Will it give them grounds to come into you home and do their own inventory? Slippery slope when it comes to "right to privacy." They'd be smarter to just stick with higher income taxes on the wealthy in an arena where they already have the courts defending their actions.
For this reason I do not see it in the cards. But on the other hand, all new taxes are designed to make the majority of the population say "go get 'em." From Martin Armstrong: Notice of "income tax" from 1913 when the avg. person earned $18 a week which was just under $1,000 a year:
ZeroHedge makes debut at White House press corps briefing
I am just puzzled, as my only asset is sole ownership of the Mona Lisa, valued at $500,000,000.
Other than that, I have no money.
So, every year, do I snip off 3% of the painting and send it in?
Autos and real estate are already in government databases. Some states also have an intangible property tax to collect tax on the market value of stocks and bonds. Florida ended such a tax in 2007, but GA may still have it. Sales taxes are likely to drive precious metals/rare coins transactions underground.
Taxes on houses and cars make sense, at least as long as there roads, police, firefighters, etc.
Taxes on coins in an SDB makes no sense, as they don't consume shared public resources. The profits from the sale is already subject to income tax.
If "they" try it, the coins will Vanish.
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